Black Friday is one of the biggest spending days of the year. Originally a tradition left to the Americas, it has taken hold of multiple markets worldwide. Patrick Brusnahan speaks with experts on how this has, and will, affect the global payments sphere
While Black Friday is the day after Thanksgiving, a North American holiday, the whole world spend the day looking for deals and savings.
While newspapers and media outlets cover stampedes for discounts at retail stores, more and more Black Friday spend is being focused on e-commerce.
GlobalData expects that Black Friday online spend will be three times more than an average day of the year. It also expects more than half of online purchases on the day will be carried out by card with alternative payment tools capturing less than a third of total sales. PayPal could gather almost one fifth of online payment transactions, but Apple Pay will only get a mere 2% of sales.
Shivani Gupta, payments analyst at GlobalData, comments: “UK consumers’ preference for card payments to make online purchases could see transactions worth almost £742m being made using payment cards in a single day.”
Payments firm Ingenico predicts that Black Friday spending in the European Union will exceed that of the US. Based on Ingenico’s data from 2016, spending uplift in the region is expected to be in excess of 450% above an average Friday, nearly three times the 162% spend increase in the US, and higher than the UK’s 318%.
“In light of these forecasts, retailers of all shapes and sizes should consider ‘opening the borders’ to Europe to take advantage of continental Black Friday fever to supplement sales performance at home,” says Gabriel de Montessus, VP Retail Global Product and Marketing for Ingenico Group.
“As Black Friday enthusiasm slows in the US and the UK, retailers in these markets should be looking to mainland Europe for new opportunities to significantly increase purchase volumes and values over the festive sales period. Retailers with a cross-border presence are likely to be the big winners this year.”
Oscar Nieboer, chief marketing officer at Paysafe, says: “While Black Friday was traditionally an in-store event, technology has changed the way we shop and more and more retailers are now using e-commerce to launch their sales campaigns before they feature in their physical stores. This has the benefit of attracting a far wider audience.
“The expansion of e-commerce coupled with ever-growing smartphone usage has enabled the rise of “dual-browsing” with 41% of Brits now buying an item on a mobile phone while in-store. The rise of dual-browsing means perfecting the omnichannel experience is now more important than ever – retailers must make sure both the online and offline experiences are positive and hassle free. For example, online and offline deals need to have the same terms and conditions as a minimum.
“The evolution of cash has led to more consumers adopting mobile wallets (24%) and cryptocurrencies (12%) for payments. While debit and credit cards remain king for consumers when making in-store purchases (51%), it is important for retailers to recognise the rise of alternative payment methods – both online and offline.
“Businesses need to wise up. Particularly during big retail events such as Black Friday and Cyber Monday, the likelihood is that consumers are browsing on various sites for the best deals on the items they are looking to buy, and with so many options available coupled with the consumer’s time-bound mindset, it’s crucial to for businesses to offer the right payments options.”
Online shopping is expected to be a key channel for sales this year throughout the EU. Last year, Ingenico processed 29% more online payments during the Black Friday weekend compared to the same period in the previous year, and the business has already made preparations to handle an even greater number of online payments in 2017.
“This growth in online shopping across the continent provides a great opportunity for smaller UK retailers looking to take advantage of booming Black Friday participation in Europe,” adds de Montessus.
“Provided they have the infrastructure in place – not just a great website, but a frictionless payments system tailored to local payment preferences and languages – they can tap into this peak in demand to expand their customer base far beyond their home market, laying strong foundations to grow their business in the future.”